Divorce rates among older adults are rising. The Pew Research Center notes that for couples over fifty, the divorce rate has doubled in the past 25 years. This trend, known as “gray divorce,” can significantly affect your estate plan. It is crucial to understand how divorce changes your financial and legal landscape. Here is how a gray divorce might impact your estate plan and what steps you should consider taking.
Revise your estate planning documents
Post-divorce, it is essential to update your estate planning documents. These documents might include your will, power of attorney, and healthcare directives. If your ex-spouse remains as a beneficiary or decision-maker, this could conflict with your current wishes. It is also wise to review your will and any living trusts to ensure they reflect your new circumstances.
Update beneficiaries on accounts and policies
Assets like retirement accounts, life insurance policies, and transfer-on-death accounts bypass your will. They go directly to the named beneficiaries. After a gray divorce, make sure to update these beneficiaries. If your former spouse remains on these accounts, they will inherit these assets, regardless of your will. Check all financial and insurance documents to ensure they align with your current intentions. Do not forget about jointly held real estate. Verify that property titles reflect any changes made during the divorce settlement.
Take action to protect your future
If you have not yet created an estate plan, now is the time. Drafting a will and establishing powers of attorney are crucial first steps. These documents help protect your assets and ensure your wishes are followed. Consult with an estate planning attorney to tailor a plan that fits your needs. This professional guidance ensures all your documents comply with state laws and reflect your current life situation.
A gray divorce can significantly impact your estate plan. By updating documents and beneficiaries, and reassessing your health and long-term care policies, you protect your future. Taking these steps ensures that your estate plan accurately reflects your wishes and protects your legacy.